GreenPath column: Help! Sneaky sis used my credit card and damaged my credit.

Jane E. McNamara is president and chief executive officer of GreenPath Debt Solutions, a nationwide, not-for-profit, providing financial literacy through consumer education and counseling for more than 50 years.

Jane E. McNamara is president and chief executive officer of GreenPath Debt Solutions, a nationwide, not-for-profit, providing financial literacy through consumer education and counseling for more than 50 years.

(Editor’s note: Jane McNamara, GreenPath president and CEO authors a credit advice column “Let’s Talk Credit” with www.creditcards.com, answering weekly questions on credit and debt.)

Dear Let’s Talk Credit,

My sister used my credit card without my knowledge. I had stopped using the card and was unaware she was using it. She did not pay on time each month and now that I am trying to buy a house, the late payments are affecting my credit score. (The account is now current). Is there anything I can do to get her activity with my card off of my credit report? — Renee

Dear Renee: Even though you did not use the card, you are still responsible because the account is in your name. The only way to prevent your sister’s negative activity from appearing on your credit report is to report the activity as fraud. This would remove the negative activity, but it would also involve the police and cause obvious legal problems for your sister. You may not want to do that.

You have already started repairing the damage to your credit by making the necessary payments to bring the account current. Even though the late payments are affecting your credit score, mortgage lenders will be looking to be sure you did pay what was owed eventually.

Your credit score will improve as you continue to make payments on time and as agreed each month.  As more time passes, the late payments will have less impact on your credit score. After seven years, the late payments will disappear from your credit report altogether.

Also, consider contacting the credit bureaus to submit a 100-word statement that will appear in your credit report. You can explain that the late payments were a result of your sister using the card without your knowledge. The statement won’t increase your score, but it may help your case with potential creditors.

Another possible option is to hold off on the home purchase for a couple of years to allow your credit score time to bounce back from the late payments. If you are purchasing the home with your spouse, you might also consider applying for a mortgage in your partner’s name only. However, you may not qualify for the home if you apply for a mortgage using only your partner’s income.

Be sure to read all correspondence from your creditors. That will help you identify unwanted use within the first month. You might also consider checking your inactive accounts online each month, or setting up alerts on your smartphone that would let you know of any activity on your accounts.

– Jane McNamara, GreenPath Debt Solutions

Let’s keep talking!

This entry was posted in Uncategorized and tagged , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s